Urban Outfitters CEO Says Messy Stores Are Costing the Company

Cluttered stores are being blamed for a lackluster quarter.

For a minute there, it seemed like Urban Outfitters was makingheadlinesregularly for putting one controversial item or another on its shelves. So when the company comes out and says that it has experienced a seven percent decline in profits for the third quarter, you’d think it’s because all the bad publicity finally caught up with them.

You’d be wrong.

The CEO of Urban Outfitters, Richard Hayne, says the issue is with how messy the stores are. The stores are “needlessly overassorted and piecey, which made the shopping experience more difficult and less appealing,” he said on a call with analysts. He compares the results to those of the company’s other businesses to show where Urban Outfitters went wrong.

Urban Outfitters has two other labels, Anthropologie and Free People, which are both doing well. Urban Outfitters sells a variety of items — from clothing to accessories to housewares — but doesn’t pull it off with the same finesse as Anthropologie. However, the company reports that Urban Outfitters online is fine.

Hayne says the company is doing all it can to clean up the stores and turn things around.

If all of this is true, I have to say I’m disappointed. Urban Outfitters has put some pretty crazy stuff out there, causing a fair amount of blow back. After all of those problems, for the company to do well save for looking like it needs some housekeeping makes it appear that all the controversy either doesn’t make a difference or is having what many think is the desired effect — bringing lots of attention and only momentary negativity.

It’s one more example that bolsters the idea that getting your name in the news is valuable whether it’s for good reasons or bad. One could argue that the loyalty to Urban Outfitters isn’t there, that the brand’s reputation has suffered from these past issues. Certainly, no one would put the company on the list of those with most integrity. But for the moment, the retailer has managed to escape its problems without too much damage.

Let’s see what happens when the company inevitably makes another misstep.